INTRO: As many as 28 people have been killed in a car bomb explosion that heavily damaged a hotel in downtown Baghdad Wednesday night, in what appears to be another in a series of attacks by insurgents against civilians. V-O-A Correspondent Nick Simeone has details.

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TEXT: Rescue crews work to pull the dead and injured out of a Baghdad hotel, just minutes after a powerful explosion ripped through it. Witnesses say the blast left a huge crater and sent flames high into the night sky and smoke clouds billowing over Baghdad.

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Turning a central part of the Iraqi capital into chaos as American troops moved in with armored vehicles and Apache helicopters to assist Iraqi police. The blast, which set nearby buildings and vehicles on fire, occurred not far from the Sheraton and Palestine hotels -- home to many foreign contractors working in Iraq, as well as journalists.

From Baghdad, U-S Lieutenant Colonel Peter Jones, of the First Armored Division, says it's not known who carried out the attack, which occurred in a hotel hosting mostly businessmen.

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Right now, nobody has claimed any responsibility. We have asked the hotel manager whether he received any threats and he has not received any threats previously.

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It was the latest in a series of attacks that have been carried out against civilians, many of them foreigners.

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Earlier, U-S military spokesman General Mark Kimmitt told reporters a clear trend is emerging in which the Iraqi insurgency is moving away from attacking. . .

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The hard coalition targets and seems to be drifting over the past few months going against softer and softer targets.

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But in Washington, White House Spokesman Scott McClellan vowed the terrorists responsible for this attack will not achieve their goals.

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This remains a time of testing in Iraq. The stakes are high. The terrorists know the stakes are high but they will not prevail.

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The attack came just three days before the first anniversary of the U-S led invasion that toppled Saddam Hussein - and on the same day that American and Iraqi forces began a large-scale operation targeting insurgents opposed to the U-S-led military occupation. (SIGNED)